Monday, 1 July 2013

Aussie dollar only

While the entire finance world is watching the retest of the broken support on S&P, I would like to attract your attention onto Aussie dollar with several charts this time from shortest to longest time frame. The 1-hr chart shows the blue support I showed in my previous post. The orange declining channel broke up after being tested 6 times today. I twitted this chart today here.
The 4-hr channel still shows the red declining channel that looks exhausted with positive divergence on daily charts (not shown here). 
The weekly chart shows the blue shaded area that has been a very strong resistance and support area since 2007. The red channel lines are not perfect at the upper band but ,unlike GBP, AUD is one of those that needs some flexibility on the channel bands. RSI's oversold condition has happened before only at 2008 bottom. The amount of shorts on Aussie dollar was at a record value last week. A good short squeeze rally should be just around the corner.
The last chart is a bit of a brainstorming. The Fibonacci chart plotted from the 2008 bottom to 1.145 indicates clear support and resistance levels shown in red ellipses. People mostly use Fibonacci levels to find the retracement targets but I often use this way to estimate the target/reversal points on an existing trend. It works more often than not. I know it is a long shot but 1.145 looks like the ultimate top for Aussie's long journey up. Hope it helps.

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